This report explores the potential impact of carbon trading on wood products and key competitors.Under a scheme design where all emitters are required to pay the full cost of their greenhouse gas emissions (100% auctioning with broad emissions coverage) wood products would benefit significantly from carbon trading – experiencing far lower cost impacts than all key competitor materials due to its low emissions status.
At a carbon price of $30 per tonne, the impact (as a percentage of the price per tonne of material) is less than 1% for rough sawn hardwood and softwood, compared to blast- furnace steel (10%), cement (16%), and aluminium (18%). However, compensation paid to these emissions-intensive trade-exposed industries will shield them, at least partially, from wood’s advantages.
Reference Number:
PR07.1059
